Solicitor did not inform me A covenant was on my property

[Carl8]

Hi everyone I am new to this site and am seeking some help. I purchased a property 18 months ago and now I want to sell it. I have used the same solicitors for the buying and selling. The buyers solicitors have found a “right of re entry” covenant on the property. The buyers lender will not lend on the property unless it’s removed. I was never informed about the covenant. The council will remove it and I need to pay £800. I have said to my solicitor I will pay the £800 but I will be making a complaint to the legal ombudsman and looking to get the money back as I feel it is the solicitors duty to inform me about a covenant even if my lenders were ok about it. Now my solicitor has email me to say that they will only get the covenant removed if I don’t make a complaint to the law ombudsman and seek my money back as they feel the covenant was not relevant and does not need to be removed. So they are holding me to ransom. Can they do this?Surely this is not allowed and they can’t do this to people? Anyone with any advice would be much appreciated. I am going to the council tomorrow to get the covenant removed my self but do I have a case for legal action?

[R0b]

Although I'm not a property expert, a right of re-entry is not usually associated as being insignificant, rather it is the opposite, and I suspect your solicitor might be aware of this hence the position they are trying to take.

They can't simply hold you to ransom if you instructed them to do the conveyancing work because that's what you are paying them to do. If they refused to do any more work then they would be in breach of contract and you would be entitled to damages.

Having said that, if you have now decided that you are paying the council directly then that may be considered conduct where you have decided to end the relationship with your solicitor, and by the way it's not just a case of paying the council £800 someone will need to contact the land registry with the appropriate forms and consents to have the covenant removed.

Based on what you've said, you might have a valid action, but did you receive a report on title form your solicitors and did it raise the covenant?

[Carl8]

Thanks for the input Rob it’s much appreciated. They are holding me to ransom. That’s exactly what they are doing. They have said that the legal costs for the council to get it removed will be £800 but like I said they won’t do that if I make a complaint to the law ombudsman. So if I go to the council myself and get it removed then they have no issue and I can get the house sold. I wasn’t made aware of the covenant so I’m presuming it wasn’t on the title report because if it was they would just say that it was on there and it’s my fault I did not see it?I think they are obviously worried about legal action as why on earth would they hold me to ransom and say they will only do that if I don’t go to the ombudsman. I just think it’s absolutely ridiculous that they have sent that to me and they can’t get away with it.*

[R0b]

They will only get away with it so long as you let them. If you think the sale of your property is worth more than this dispute, then deal with that first and pick the issue up afterwards. If your losses are £800 then that's what you are going to be claiming against the solicitor.

What isn't clear is whether the solicitor has put this in writing or simply told you verbally. If it is the latter, then any future claim you might have is going to be difficult because you need the evidence prefably in writing.

So, a couple of options could be:

1. Don't make the complaint, sell the property and then complain afterwards claiming the costs incurred in removing the covenant, which would include the £800 + the solicitor costs in getting the covenant removed.

2. Call their bluff and make a complaint to the firm directly (if I recall you can't go to the Legal Ombudsman directly) and then to the LeO. You'll need to evidence what they have said to you.

You can also call the SRA if you are really worried as I would think what they have said to you is likely to be a breach of the SRA Standards and Regulations. I'm fairly certain that the SRA would not take kindly to a firm of solicitors telling you in writing that they won't do the work they were instructed to do unless you don't make a complaint against them - which was a separate matter and not the same instructions here.

There are options available to you, but you need to weigh up the risk and decide what is best. Either you do something about it or suck it up and move on but dithering and moaning about how they've conducted themselves is not going to get you any further forward. From the sounds of it, the sale of your property is probably most important here so you may want to deal with that first.

Having said all of this, it really depends what the covenant says about right of re-entry and whether it is considered material in the circumstances, but it ought to have at least been on the report on title.

[Carl8]

Yes they have done it via a email. So I have the evidence. Well that is what I thought first of all. But surely they will make me sign a non disclosure?I wouldn’t of thought they will just take my word for it that I will not make a complaint?But you are right I do just want the property sold so I am going to pay the £800 regardless. The reason for me getting the covenant taken off myself is so they can’t get me to sign a NDA as I’m sure that’s what they will do. I e had a look on the ombudsman website and yes you can make a complaint directly to them. And I will also go to the SRA. One of my other complaints is that they took 15 working days to reply to my email about why I wasn’t informed about the covenant and none of my calls were replied to. The ombudsman says you can complain about (bad communication). I just can’t let them get away with it and I have now lost out on the place I was supposed to rent as they have taken so long. I have told them I want the covenant removed and I will pay but I am waiting for a reply so if I pay the council directly they have no hold over me and the house gets sold.*

[R0b]

I'm surprised they've put that in writing but as everything can be interpreted in more than one way and we haven't seen the email sent to you, we can only speculate. I think the main thing is to get your house affairs in order and then take the complaint up afterwards.

Regardless of whether they want to put you into an NDA, the SRA has previously stated that any confidentiality arrangement should not prevent people from reporting any issues to the SRA - see this link.